The Social Security compromise: Ideologically unpopular, fiscally sound

Most members of Congress and lay citizens agree that the fundamentally moral and economic stalemate that has resulted in the current sequester should never have gone this far and that the resulting budget cuts are unwanted and ill-advised. Nevertheless, President Obama’s proposed solution is under fire from all sides. The president’s new budget includes an economic and political compromise: a plan to trim $100 billion from Social Security over the next 10 years. In exchange, he has proposed some tax increases on the wealthy and to close a few notorious tax loopholes. Though unpopular, Obama’s plan presents a well thought-out, balanced and morally sound fiscal approach that will benefit the country economically and socially in the long run.

The middle ground hoped for with respect to Social Security reform is to keep the program available for those who need it, but to make it a relatively unattractive option. Similar to a safety net during a trapeze act, ideally the performer hopes to stay on the trapeze. No one wants to plummet into the safety net, but everyone is happy it’s there. A similar middle ground is where the president’s new budget falls.

Obama’s proposed reforms echo some of the reforms that then-President George W. Bush presented in 2005. Author and journalist Jonathan Rauch writing for the National Journal explains that the first part of Bush’s plan to reform Social Security was to “reduce the growth of benefits … to bring the program into long-term fiscal balance.” Following suit, the current president has proposed chaining the rate of Social Security benefits to the Consumer Price Index: a reasonable compromise.

Democrats are predictably furious at the prospect of any changes to Social Security. Their outrage is not as much based on the very sound economic principles at work in the plan; rather, their anger stems from what they view as ideological treason. The left is responding emotionally to what they perceive as cuts to Social Security, when in fact no such cuts exist. The president’s new plan does not immediately lower any citizen’s benefits. What it does is make the rate at which benefits increase more realistic. When emotion is taken out of the equation, the plan does not seem nearly as outrageous as many left-leaning pundits would have cable news watchers think.

{mosads}What some members of Congress as well as the general public fail to realize is chaining the annual Social Security Cost of Living Adjustment to the Consumer Price Index further de-incentivizes citizens from depending solely on Social Security in their retirement years, while at the same time pairing the rate of increases to a more specific barometer of actual increases in the cost of living. Some Republican members of Congress that are well aware of that fact are pretending to miss the point. The changes to Social Security that the president, a Democrat, has proposed are fiscally conservative proposals, yet Speaker John Boehner, a Republican, still claims they don’t go far enough. While congressional leaders play politics, the public is left to wonder what’s next.

Ensuring the welfare of the elderly is a moral priority for both Democrats and Republicans despite the rhetoric. What the two camps disagree on is the means by which Social Security should be paid for and implemented. Obama rightly included some tax increases in his deal. Further, the Social Security modification is fiscally prudent and economically sound. The elderly will continue to receive assistance and representatives on both sides of the aisle can sleep well knowing that their moral obligation to take care of some of the most vulnerable members of society has been met.

In times of financial uncertainty, all but the most important items in the budget are on the chopping block. Fortunately, Social Security remains un-chopped. Equally as fortunate, the program can be financially streamlined, which may keep it around long enough to serve the Millennial Generation should they find themselves 65 years of age and in need.

Bailey is an undergraduate student at the Columbia University School of General Studies.